vs. ) CASE NO. 89-3066
NESTOR A. TAVARES-PORTO, )
Respondent. )
Pursuant to notice, this matter was heard by the Division of Administrative Hearings by its duly designated Hearing Officer, William R. Dorsey, Jr., on September 28, 1989, in Miami, Florida.
For Petitioner: James A. Bossart, Esquire
The issue is whether Respondent should be disciplined for failure to return collateral for bail bonds he wrote after the bonds were discharged.
By a two-count Administrative Complaint, the Department of Insurance charged Respondent, who was licensed as a limited surety agent (bailbondsman), with violations of Chapter 648, Florida Statutes. Count II of the Administrative Complaint was voluntarily dismissed. The gravamen of the remaining charges were that Respondent failed to return $2,400.00 entrusted to him as collateral security on several bailbonds after the bonds were discharged, but improperly retained the collateral for his own use.
At the final hearing, the Petitioner presented testimony of two witnesses, Edna Albury and Thomas A. Broderick, Jr. The Respondent testified on his own behalf.
The Petitioner offered 10 exhibits which were received into evidence.
Respondent did not offer any exhibits. The proposed findings of fact filed by the Department have been adopted, as amended below. No proposed findings were filed by Respondent.
Respondent, Nestor A. Tabares-Porto, was licensed by the Department, at all times relevant to these proceedings, to engage in the business of limited surety insurance (Bailbondsman).
The Respondent was employed as a limited surety agent with Tommy Broderick & Son Bailbondsman of West Palm Beach from late 1983 to June 1984.
In February 1984, Edna Albury approached the Respondent at the Palm Beach County Jail and requested him to write a bailbond for her son, Stanley Martin, who had been arrested and incarcerated.
Respondent wrote two bailbonds on Stanley Martin of $3,000.00 each.
The Respondent asked Edna Albury for $2,000.00 in return for writing the bonds. Edna Albury gave the Respondent $600.00 in currency in payment of the bond's ten percent premiums. An additional $1,400.00 in currency was given to Respondent by Ms. Albury to be held as collateral security for the two bonds to ensure Stanley Martin's appearance in court.
In return, Respondent gave Ms. Albury two receipts, one for the $600.00 bond premium payments, the other for the $1,400.00 collateral security. Respondent signed both receipts.
The receipts Respondent gave to Ms. Albury were not of a type in use at that time, or any other time, by Tommy Broderick & Son Bailbonds.
The bailbonds in the amount written by the Respondent for Stanley Martin would have been considered large bonds by Tommy Broderick & Son Bailbonds. Tommy Broderick and Son Bailbonds usually only accepted cash collateral on small bonds of $500.00 or less. It was more feasible economically for the bailbond agency to obtain property as collateral, an indemnity agreement, or promissory note to secure large bonds rather than to accept cash as collateral.
Tommy Broderick & Son Bailbonds never received the $1,400.00 collateral security that had been given to Respondent by Ms. Albury.
The bonds were written and Stanley Martin was released from jail.
On or about June 15, 1984, the Respondent was terminated from his employment with Tommy Broderick & Son Bailbonds. The reason for his termination was that the Respondent was not turning in to Tommy Broderick & Son Bailbonds cash collateral security that he received for writing various bailbonds, but was retaining it for his own use and benefit.
Sometime in July 1984, the Respondent opened his own bailbond agency in West Palm Beach which was known as Gun Club Bailbonds or Nestor Bailbonds.
On or about August 1, 1984, at the request of Edna Albury, the Respondent wrote a third bond on Stanley Martin. The Respondent received
$500.00 in currency from Ms. Albury as the premium. Respondent also received a check in the amount of $1,000.00 from Ms. Albury to be held as collateral security. The Respondent received the check in blank and wrote in his name as payee. The Respondent also received the title to Ms. Albury's automobile as additional collateral. Ms. Albury received two receipts signed by Respondent for the collateral.
The Respondent endorsed and cashed the $1,000.00 check at Barnett Bank of Palm Beach County, Ms. Albury's bank. The Respondent did not have a business bank account at Barnett Bank of Palm Beach County.
Stanley Martin was sentenced by the Palm Beach County Circuit Court to serve four years in prison on August 2, 1984. The bonds previously written were discharged and the liability on the bonds terminated.
At a time after the bonds were discharged, which cannot be precisely determined from the evidence, the Respondent returned Ms. Albury's car title, but did not return any portion of her cash collateral.
Shortly after the bonds were discharged, the Respondent closed down his bailbond agency. The Respondent acted without returning or otherwise accounting to Ms. Albury for either the $1,400.00 collateral security which Respondent received from Ms. Albury in February 1984, or the $1,000.00 collateral security received on August 2, 1984.
Ms. Albury energetically searched for the Respondent's whereabouts for a period of time in an effort to recover her collateral. She left messages with the Respondent's answering service but Respondent failed to contact her. She took off three days and several afternoons from work in order to try to locate Respondent. She visited the Respondent's business address but Respondent had vacated the premises. Ms. Albury retained an attorney to assist her in regaining her collateral security. In the end, however, she could not locate Respondent. Ms. Albury has never obtained the return of her $2,400.00 collateral security.
Ms. Albury moved to a new residential address in November 1984. She placed a forwarding order with the post office, she is listed in the telephone book. The Respondent never contacted her about, nor returned, the collateral security. Respondent's failure to return the collateral is willful misconduct.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties to this proceeding pursuant to Section 120.57(1), Florida Statutes.
The standard of evidence required to suspend or revoke an insurance license is that of clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).
The Administrative Complaint alleges that the Respondent violated 10 provisions of Chapter 648, Florida Statutes: section 648.44(1)(g); 648.45(2)(d), (e), (f), (g), (h), (j), and (1); 648.45(3)(b) and (d); and also violated Rule 4-1.005, Florida Administrative Code. These statues provide:
Section 648.44(1) No bail bondsman or runner shall:
(g) Accept anything of value from a principal for providing a bail bond except the premium and transfer fee authorized by the department, except that the bondsman shall be permitted to accept collateral security or other indemnity from the principal or other person in accordance with the provisions of s.648.442.
Section 648.442(1) Provides, in relevant part:
Collateral security or other indemnity accepted by a bail bondsman, except a promissory note or an indemnity agreement, shall be returned upon final termination of liability on the bond ...
Section 648.45(2) The department shall deny, suspend, revoke, or refuse to renew any license issued under this chapter or the insurance code, and it shall suspend or revoke the eligibility of any person to hold a license under this chapter or the insurance code,, for any violation of the laws of this state relating to bail or any violation of the insurance code or for any of the following causes:
Willful use, or intended use, of the license or permit to circumvent any of the requirements or prohibitions of this chapter or the insurance code.
Demonstrated lack of fitness or trustworthiness to engage in the bailbond business.
Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.
Fraudulent or dishonest practices in the conduct of business under the license or permit.
Misappropriation, conversion, or unlawful withholding of moneys belonging to a surety, a principal, or others and received in the conduct of business under a license.
Willful failure to comply with or willful violation of any proper order or rule of the department or wilful violation of any provision of this chapter or the insurance code.
Demonstrated lack of good faith in carrying out contractual obligations and agreements.
Section 648.45(3) The department may deny, suspend, revoke, or refuse to renew any license issued under this chapter or the insurance code, or it may suspend or revoke
the eligibility of any person to hold a license under this chapter or the insurance code, for any violation of the laws of this state relating to bail or any violation of the insurance code or for any of the following causes:
(b) Violation of any law relating to the business of bail bond insurance or violation of any provision of the insurance code.
(d) Showing himself to be a source of injury or loss to the public or detrimental to the public interest or being found by the department to be no longer carrying on the bailbond business in good faith.
Rule 4-1.005, Florida Administrative Code states:
No surety, bail bondsman or general lines agent engaged in the bail bond business shall make any charge, collect, or receive any fee or consideration other than the premium based on rates in current use; provided, however, that nothing in this section shall prohibit collateral security or co-indemnity agreements, and provided further that in instances where an additional surety, bail bondsman or general lines agent located in a county or state different from the originating agent or bail bondsman executes the bond the premium may additionally include as part thereof an execution and transfer fee, not to exceed an total of fifty dollars ($50.00) for any one defendant.
The Respondent received $2,400.00 from Edna Albury as collateral security on bailbonds. Upon discharge of the bonds, the Respondent willfully has failed to return or even to attempt to return the collateral to Ms. Albury. The Respondent owed an obligation to Ms. Albury to see that her collateral was properly returned. This obligation continued even after the Respondent's termination from his employment with Tommy Broderick & Son Bailbonds. The agent, not the bailbond agency, is licensed; and the agent, rather than the agency, owes the obligation to return collateral. Moreover, the evidence shows that Respondent did not turn the money taken as collateral over to Tommy Broderick & Son Bailbonds. Respondent has, therefore, violated Sections 648.44(1)(g); 648.45(2)(d), (e), (f), (g), and (1); and 468.45(3)(b), Florida Statutes.
By not returning the cash collateral security, the Respondent received a consideration other than the bond premiums. He, therefore, has violated Rule 4-1.005, Florida Administrative Code.
The Respondent's conduct and actions are detrimental and a source of injury, not only to Edna Albury, but to the public at large. Respondent has violated Section 648.45(3)(d), Florida Statutes.
These violations are all violations of Chapter 648, Florida Statutes.
Based on the foregoing, it is RECOMMENDED that Respondent, Nestor A. Tabares-Porto, be found guilty of the statutory violations set forth above and this his license and eligibility for licensure as a limited surety agency (bailbondsman) be revoked.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 28th day of December 1989.
WILLIAM R. DORSEY, JR.
Filed with the Clerk of the Division of Administrative Hearings this 28th day of December, 1989.
James A. Bossart, Esquire Department of Insurance
